The US Department of the Treasury on Wednesday added Taiwan to a list of countries being monitored for currency manipulation, the first time the nation has made the list since 2017.
The department issued its semiannual report to the US Congress on the policies of the US’ top 20 trading partners, which said that Vietnam and Switzerland had met the criteria for being labeled currency manipulators.
The manipulator designation has no specific or immediate consequence, beyond short-term market impacts, but US law requires the government to engage with the listed nations to address the perceived exchange-rate imbalance.
Photo: Tyrone Siu, Reuters
Penalties, including exclusion from US government contracts, could be applied after a year if the label is not removed.
Taiwan made it to the list of nations being monitored, along with India and Thailand, joining China, Japan, Singapore, South Korea, Germany, Italy and Malaysia, which were named in previous reports.
The department’s report, Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, states that a nation can be identified as a currency manipulator if it has a bilateral trade surplus with the US of at least US$20 billion, a current account surplus in excess of 2 percent of its GDP, and has engaged in persistent, one-sided intervention in the foreign exchange market. Taiwan met two of these criteria, it said.
First, Taiwan’s “persistently large current account surplus” — meaning that the value of its exports exceeds the value of its imports — reached 10.9 percent of GDP over the four quarters through June, the report said.
Taiwan’s bilateral trade surplus with the US expanded sharply during this period, rising to US$25 billion from US$18 billion the year before, the report said.
The report said that Taiwan had publicly disclosed its foreign exchange intervention in March, and encouraged it to “allow the New Taiwan dollar to appreciate to help reduce its large and durable external surpluses.”
“The Treasury welcomes Taiwan’s recent steps toward transparency and looks forward to continued efforts in this area,” it added.
The department usually publishes the assessment report in April and October, but had delayed its April report until Wednesday because of the COVID-19 pandemic.
Economies on the list must remain there for at least two consecutive reports to help ensure that any improvement “is durable and is not due to temporary factors.”
The last time Taiwan was on the monitoring list was from April 2016 to April 2017, while it was cited as a currency manipulator in 1988 and in 1992.
Additional reporting by Bloomberg
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
RSS